Do You Know What Business Vehicle Expenses are Tax Deductible?

In either case you need to keep a log of your business travels (such as family appointments) and mileage to support your deduction(s). You may be able to choose if you deduct the actual costs or use a standard mileage reimbursement for business miles driven.  Actual costs of a business owned vehicle include all fixed and operating costs.  Depreciation deductions will be limited and you will need to only deduct the business-use percentage of expenses or include in income the value of personal vehicle usage.The most straightforward method for deducting the business use of your personal vehicle is using the IRS standard mileage rate, currently 56.5 cents per business mile driven. (Note this rate changes annually and sometimes more frequently.)  The standard mileage rate takes into account the fixed and operating costs of the vehicle without having to keep specific receipts, e.g. depreciation, oil, gas, maintenance… Certain expenses, such as business parking and tolls, can be deducted in addition to the standard mileage rate.

More detailed information about deducting actual vehicle expenses or the standard mileage rate, including limitations on when each can be used and when changes are allowed can be found here.

Article written by Richard R. Dahl, a CPA and Senior Tax Manager with Security National Life Insurance.  The content of this article is not intended as tax advice and cannot be used for avoiding tax penalties or promoting or recommending any transaction.  Individual circumstances should be discussed with a qualified tax professional.